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M'BISHI RAYON DEAL TO HELP M'BISHI CHEM FEND OFF RIVALS

Posted on: Thu, 19 Nov 2009 23:01:00 EST

Symbols: MTLHF, MUCCY

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TOKYO, Nov 20, 2009 (AsiaPulse via COMTEX) --
MTLHF | Quote | Chart | News | PowerRating -- Growing pressure from emerging
foes in the Middle East and China is behind Mitsubishi Chemical
Holdings Corp.'s (TSE:4188) decision to purchase Mitsubishi
Rayon Co. (TSE:3404).

"To survive the global competition, we need to expand our
scale and shift our focus toward high-performance materials,"
Mitsubishi Chemical president Yoshimitsu Kobayashi told a news
conference Thursday.

Through the acquisition, the company aims to shrink its
commodity-grade petrochemical operations, which are facing
intense competition from Middle Eastern and Chinese rivals,
while embracing Mitsubishi Rayon's carbon fiber and water
treatment membrane businesses.

By becoming a Mitsubishi Chemical subsidiary, Mitsubishi
Rayon "aims to strengthen our business foundation, including
our financial health, to drive global business expansion",
president Masanao Kanbara said.

The company has become the world's top acrylic resin
material producer, following the acquisition of U.K.'s Lucite
International Group Ltd. in May. But the 150 billion yen
purchase also put a dent in Mitsubishi Rayon's financial
health.

According to Mitsubishi Chemical's announcement Thursday,
its tender offer for a 100 per cent stake in Mitsubishi Rayon
will run from early February until the end of March. At 380 yen
(US$4.27) per share, the offering price is 40 per cent higher
than Mitsubishi Rayon's closing price of 271 yen Wednesday. Any
shares in Mitsubishi Rayon that Mitsubishi Chemical does not
own at the close of the tender offer will be converted into
Mitsubishi Chemical shares via a stock swap.

The merger of Mitsubishi Chemical and Mitsubishi Rayon will
create the world's sixth-biggest comprehensive chemical firm,
passing U.S. firm DuPont. The two Mitsubishi group firms'
combined sales would come to around 3.5 trillion yen
annually.

(Nikkei) rw

For full details on (MTLHF) MTLHF. (MTLHF) has Short Term PowerRatings at TradingMarkets. Details on (MTLHF) Short Term PowerRatings is available at This Link.

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